Number One Priority of Digital Transformation: Create Exceptional Customer Experiences
It is all about the customer. HBR recently published its December 2016 study on Digital Transformation and found that 40% of the executives surveyed listed “Create an Exceptional Experience” as the number one priority for their digital transformations. And another 28% listed it as the number two reason – that means 68% (more than two-thirds of all surveyed executives) agree that digital provides the opportunity to change the game in customer experience.
By comparison, the next highest reason listed is operational efficiency (24%), and the third highest rated reason is completing the solutions landscape with services and/or moving to a subscription based model (23%). While the last two categories are important, the numbers show -- and clients tell me -- the highest priority is to use digital to innovate the customer experience.
What is the digital advantage for experience? The digital company has several capabilities that provide a better platform for innovation and a faster time to market. Let’s look at a project and compare the effort and results for a digital leader (top 25% digital maturity) and a digital laggard (bottom 25% digital maturity).
1. The Leader utilizes journey mapping and analytics to understand their friction points for each of the personas. | 2. The Laggard has a group looking at new technologies and sits through a vendor demo on use cases that they have used for other companies. |
3. The Leader identifies a couple of friction points and hands off to an innovation team to explore and rethink the problem interactions. One is finding your car in a parking lot for a rental car company that does not have covered space signage. | 4. The Laggard takes demo information back to his organization and tries to find a problem that can be solved utilizing the tech. The same problem is identified and the technology is step by step directions for your phone. |
5. The Leader taps an innovation budget and process to get started right away. | 6. The Laggard does a back of the envelope business case and submits to the finance and LOB decision makers for approval. |
7. The Leader identifies the personas and the problem statement. Starts doing research on competitive and technology trends for ideation. The personas are Business Renters, Personal Renters, and Family Renters. | 8. The Laggard finally gets funding approval and assembles a cross functional team to learn about the technology and to apply it to the problem. |
9. The Leader spends some time really empathizing with the personas and providing possible ideas. | 10. The Laggard starts analyzing their app and how to integrate the step-by-step direction functionality. |
11. The Leader prioritizes drones as a possible solution. They are inexpensive (vs. covered signage) and can be flown to wait over the top of the target car. | 12. The Laggard starts to look at how to get topographical maps of the target rental lots. |
13. The Leader starts with user stories and a few sprints for the Proof of Concept (PoC). They decide that the micro services already built for his infrastructure to allow the needed consumer rental information to pass to a drone. | 14. The Laggard is getting business sign off on requirements. The integration requires programming an interface to their rental system to get the rental contract and target car rental space for the mapping app. |
15. The Leader shows for a stand up in an early sprint the use of the APIs in the drone platform to manage the takeoff, hover over the target car until the customer arrives there, and return to the rental counter. The development and UX members are having fun. | 16. The Laggard customizes the mapping software to handle step by step instructions. |
17. The Leader takes the PoC and tests with users and finds a great reaction to drones, but wants color coding for easy identification with multiple customers. Adding a color of your drone feature to the app is easy and the change is made very quickly. | 18. The Laggard tests with internal employees and finds that holding the phone out in front of you while dragging luggage is not very convenient. They make the decision to look at using sound to guide the customer. This not a quick pivot, but a new technical integration effort. |
19. The Leader hardens the PoC and pilots at a few properties. Analysis of usage, consumer reactions, learning time, etc. are all published via dashboard and minor changes are iterated. | 20. The Laggard rolls out at a few properties and surveys customers that use the maps. |
21. The Leader gets rave reviews and a number of suggestions on how to improve (let the drone start the car, open the trunk, flying speed, etc.) and usage is high. | 22. The Laggard gets high usage for the first couple of months, but then the novelty wears off and so does usage. |
The Leader starts from the Customer journey's friction points to reimagine new experiences.
The digital advantage is clear in the quality of the solution, time to market, ease of integration, analytical measurement and ability to pivot.
If we step back and look at this in light of several projects that are running, the Digital Leaders start to get an insurmountable advantage. Their ability to integrate is fast, their ability to fail fast and learn is built in and their ability to know where the friction points are for solution targeting drives the process. They can run more innovation projects and deliver them faster with the same resources and less expense. The Digital Laggard will have some project successes, however their timeline is longer (they have to make an analog infrastructure work for data integration), there is more financial rigor for project launch (delays starting and slow tollgate reviews), and waterfall vs the muscle memory for agile movement prevents easy pivoting, slows delivery and can soften the solution success.
This example touches on some of the Digital Agility characteristics:
MOVING FROM SUCCESSFUL ANALOG | MOVING TO DIGITAL AGILITY |
|---|---|
Analog Infrastructure (on premise, not integrated, no easy way to get functionality to business processes outside of application). | Digital Infrastructure - in cloud, or hybrid IT with microservices or APIs to get needed services to new business processes |
Data is in its own application store or in several across the organization | Data is centralized with real time updates and available for new business processes |
Waterfall Development | Agile Development |
Technology Led Innovation (my client calls it a hammer looking for a nail) | Customer Journey Led Innovation with Design Thinking |
Analytics by department or LOB | Embedded analytics for decision making |
Must Succeed the First Time Rewards and Mindset | Fail Small, Fail Fast and Learn |
Financial Tollgates and PMOs | Easy Seed Money for Innovation and Lifeguarding |
Directed Work and Timeline measurement | Collaborative and Engaged Employees |
Launch of best in class product | Minimum Loveable Product (MLP) and iterative releases |
One Size fits all digital experience | Persona driven personalized experience |
While not true in every case, both of these companies could have a digital strategy and both could be sponsored at the highest level making a high level digital DIY assessment less valuable. More detailed criteria is needed to review the organization and really understand the roadmap by observing the actual customer experience. Put another way, in order for a digital assessment be valuable to the organization, it has to cover all three areas: Strategy & Culture, Digital Capability Maturity, and Digital Customer Experience.
So, what can the Digital Laggard do to catch up? While the pressure is great to be digital, not everything can be done at once. This kind of company has to take steps that yield short term wins while also building for the future. In some cases, they are delivering a less than optimal experience today at a higher cost. An honest look at the capabilities, culture and customer experience can help to determine what projects can bear fruit quickly, to help set up the right roadmap for becoming a digital leader.
And what can the Digital Leader do to build on their advantage? Optimize capabilities and projects for success. Continually assess for changes in customer needs and update for low hanging fruit. Look at the overall portfolio through the lens of the digital company of the future in order to ensure you are on the right path. Ensure you’ve backed the right projects in the best order, and test that the methodology in place will yield exceptional customer experiences.